Negotiations between the city of New Orleans and developer Gatehouse Capital Corp. for the opportunity to redevelop the former World Trade Center building have ceased.
Gatehouse Capital Corp. was selected by the city to redevelop the property in 2013. Since then, the parties had been negotiating a potential deal.
Negotiations, ongoing for over 6 months, reportedly fell apart over financing and the proposed deal structure.
Gatehouse, in conjunction with local development partner DAG Development, had proposed a 245-room W Hotel and 280 luxury apartments on the 13th through 30th floor.
The city recently informed the developer that its final offer for the development had been rejected.
CityBusiness reports that in an April 22 letter, the Deputy Mayor Cedric Grant, interim CEO of the New Orleans Building Corp., notified Gatehouse CEO Marty Collins it was rejecting the development group’s “best and final offer” to rehabilitate the vacant office tower into a W Hotel with apartments on the upper floors. The letter stated that the terms Gatehouse proposed “do not provide an acceptable return to NOBC on this asset.”
“Negotiations between the city and Gatehouse Capital for the redevelopment of the former World Trade Center site have been unsuccessful,” the statement said. “As arguably the most valued property on the river, this iconic building is prime for redevelopment and should receive fair market value for rent. The city will re-issue a request for proposals within 60 days.”
Gatehouse had originally proposed a $190 million development, of which they would have offered $10 million to the city for an up front lease payment on a 99 year lease.